06-04-2009, 02:07 AM
Shahbaz, Wheather company X fails to deduct tax or not u/s 153,
It shall have two effects on both the companies;
EFFECT ON COMPANY B It would neither debar Company B from tax obligation nor it shall have any effect on return file by it,Since company B's profit is assumed to be taxable & if any company deducts its tax then company B will be subjected to adjust the same at the time of filling its return,
EFFECT ON COMPANY X
Company X shall not be required to pay any additional tax or penality, since additional tax & penality does not applicable on section 153, But if any company fails to deduct Tax under section 149 - 158 & 232, if applicable, then all such payments/ expenditures shall become inadmissible while calculating taxable income. i.e. all such payments will be added back to the taxable income or alternatively it may be said that such payments, on which Tax has not been deducted, will become the part of income & will accordingly be treated as taxable income.
Best Regards
It shall have two effects on both the companies;
EFFECT ON COMPANY B It would neither debar Company B from tax obligation nor it shall have any effect on return file by it,Since company B's profit is assumed to be taxable & if any company deducts its tax then company B will be subjected to adjust the same at the time of filling its return,
EFFECT ON COMPANY X
Company X shall not be required to pay any additional tax or penality, since additional tax & penality does not applicable on section 153, But if any company fails to deduct Tax under section 149 - 158 & 232, if applicable, then all such payments/ expenditures shall become inadmissible while calculating taxable income. i.e. all such payments will be added back to the taxable income or alternatively it may be said that such payments, on which Tax has not been deducted, will become the part of income & will accordingly be treated as taxable income.
Best Regards
